Chapter 17 Financial Management and Stress Management

CHAPTER 17 FINANCIAL MANAGEMENT AND STRESS MANAGEMENT You may wonder why this chapter is titled “Financial Management and Stress Management,” or why financial management and stress management are covered in the same chapter. Although there are many causes of stress, one primary cause of stress in families is not having enough money to meet needs. This cause of stress can result in spouse and child abuse, which is not acceptable behavior. All commands have a Family Advocacy Program (FAP) to help families undergoing stress. Many commands provide financial counselors to advise Sailors in financial difficulties. Family service centers or your leading petty officer (LPO) are some examples of who you can seek for financial counseling. The Naval Military Personnel Manual section 62 offers some good advice to all paygrades. MILITARY PAY SYSTEM Learning Objectives: When you finish this chapter, you will be able to— Identify the various types of military pay, the Leave and Earnings Statement, and the method used to deposit military pay. Recognize the responsibilities of making sure that pay and earnings statements are correct. Identify liberty and leave and recognize their differences. The military pay system affects you directly. The amount you receive every payday is determined by the military pay system. Therefore, you should have a basic understanding of the difference between pay and allowances and the different types of pay and allowances. You should also understand a little about allotments and government insurance. In this section, you will learn about the basics of the military pay system. The pay system is very complex and pay and allowances are subject to change. If you need specific information about your pay, you should consult your disbursing office. PAY Pay is money paid to you for services rendered. All pay is taxable as income. The Navy has three types of pay: 1. Basic pay 2. Incentive pay 3. Special pay You may receive all three types of pay if you are qualified, or you may receive only basic pay. Navy personnel paychecks are deposited automatically into their checking or savings account via the Direct Deposit System (DDS). To get paid, you must open up a savings or checking account. Basic Pay Basic pay is the pay you receive based upon your paygrade and your length of service. All people on active duty in the Navy receive basic pay. Navy personnel receive longevity (length of service) raises after 2, 3, and 4 years of service. After that, they generally receive a longevity raise for every 2 years of service. Personnel in paygrades E-1 and E-2 don’t receive longevity raises. An E-3 doesn’t receive longevity raises after 4 years of service. Length of service for pay purposes includes active-duty and inactive Reserve time, former service (if you have a broken-service enlistment), and service in other branches of the U.S. armed forces. 17-1 The policy of the Navy is “to promote habits of thrift and encourage… conduct of financial affairs in such a manner as to reflect credit upon the naval services." As a Navy sailor it is your responsibility to seek out financial information to avoid any financial problems.